Newsletter

UGA endowment reaches $580 million, setting new record

The value of the University of Georgia Foundation’s endowment reached an all-time high of $580 million in August.

That’s the good news.

The bad news is that the previous record high of $579 million for the investment portfolio was set in October 2007, five years ago, said Joe Frierson, chairman of the foundation’s investment committee, in a meeting of the foundation’s board of trustees in Athens.

The foundation’s volunteer board of trustees is responsible for managing money and property thousands of donors give to UGA each year. Proceeds are used for student scholarships, salary supplements for university professors, campus construction projects, certain kinds of travel, entertainment and other expenses for UGA President Michael Adams, and other purposes the foundation deems helpful to UGA.

The endowment is spread across stocks, bonds, hedge funds and other types of investments.

Growth was just about flat for the 2012 fiscal year, but was better as the 2013 fiscal year began, Frierson told the group, which met Thursday and Friday on UGA’s new Health Sciences Campus, shared by UGA’s School of Public Health and the Georgia Health Sciences University-University of Georgia Medical Partnership.

Although last year’s investment returns were not spectacular, UGA fared well compared to many universities, Frierson told the group.

“Our strategy of asset allocation does work,” he said.

The foundation’s investments took a beating in the long economic downturn of the last several years, as endowments declined at most universities.

In fiscal year 2008 and the first three months of 2009, as a global recession began in earnest, the foundation’s assets lost about $80 million in value.

The Dow Jones Industrial Average, one indicator of prices in the overall stock market, declined by more than half in the downturn, from a high of about 14,165 in late 2007 to 6,547 in early 2009.

The Dow Jones average climbed back up above 13,000 earlier this year, however.

Much of the foundation’s investment portfolio is in stocks and bonds.

UGA fundraisers, including the UGA Athletic Association, have obtained gifts and pledges of more than $100 million for seven years in a row, according to Tom Landrum, senior vice president for external affairs at UGA.

But with the hiring of several new professional fundraisers, UGA is gearing up for a big capital campaign in the near future, Landrum told the group.

UGA administrators are now laying the first segment of the groundwork, which is to decide on the academic priorities of the campaign.

Once that part is finished, then planners will have to set a dollar goal for the campaign, he said.

Landrum said the campaign’s goal would likely top $1 billion, and possibly $2 billion, depending on what truly seems feasible.

The campaign won’t get under way in earnest until a new UGA president is in place. Adams is set to step down on June 30.

But university planners decided to go ahead and lay the groundwork for the campaign before UGA’s next president is named, Landrum said.

“We are trying to make sure when we start we have all the pieces in place,” he said.